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From: gam@amdahl.UUCP (gam)
Newsgroups: net.politics
Subject: Re: Freedom, coercion, and free markets
Message-ID: <1023@amdahl.UUCP>
Date: Thu, 24-Jan-85 03:27:53 EST
Article-I.D.: amdahl.1023
Posted: Thu Jan 24 03:27:53 1985
Date-Received: Fri, 25-Jan-85 21:39:13 EST
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> = [ from "Politics and Markets: The World's Political-Economic System",
>   by Charles E. Lindblom ]

Throughout your excerpt, Lindblom's arguments are rather abstract.  He
explains how things "ought to work" by "logic", but he is so wrapped
up in his hypotheses he never bothers to look at how the real world
works. The best he can do is vague reference to the real world in the
case of England, and even then doesn't examine it much.

What Lindblom is ignoring is that people *create* wealth, they don't
just inherit it.  But we'll get to that.  He also tends to view
situations as static rather than dynamic.  Thinks are *instantaneously*
bad, so the free market is a failure.  Here is an example:

> An immediate objection to [free transactions] is that it simply ignores
> the effect of a transaction on persons not a party to it--those who must
> endure the smell of a new factory in the area, the noise of motorcycles
> breaking the quiet of their neighborhood, or the risk of accident in a
> nuclear power plant.  In a market system, they make no free choice; these
> effects are imposed upon them.  

If people don't like the neighborhood, they leave.  When people leave
they take their property with them.  This produces a decline of wealth
for the area.  It is not in the interests of people wanting to maintain
a lively economy to encourage the native wealth to leave.

People are also less likely to move *into* undesirable areas, so the
influx of wealth is cut off.

Lindblom makes his hypothesis (which sounds good) but fails to follow
thru with the *REAL* consequences of ignoring the effects on "persons
not a party to it".

Let's face it -- do *you* want to move to Gary, Indiana?

>         ...How much I can accomplish and how effectively I can protect
> myself through exchange depends in large part on what I own and can offer in
> exchange....

So far so good.

>         ...A hidden assumption in the conventional argument is that private
> property, on which exchange rests, does not itself constitute a barrier to
> freedom ...

This is a set-up.  Lindblom says that the "exchange" is of "private
property"!  He has decided to ignore that individuals can make money
by WORK without even owning private property.

Remember WWII, when the Japanese on the West Coast had all their
property taken away and they were incarcerated?  (Even then they were
as a group successful and propertied, which some believe was part of
the motivation for their incarcertion).  So, they come out after the
war with nothing.  What happens?  By 1969, Japanese-Americans as a
group had family incomes of 132% of the national average!
(Anglo-Saxons were at 105%).  Many now own *their own businesses*!

Why did this happen? They *worked*!  They exchanged their skills for
money, they did a good job and were reliable.  They're property
owners again!

Amazing, isn't it?

But Lindblom goes right on abstracting ....

> If
> one imagines a small society sharing assets collectively which is then
> transformed, by assignment of every asset to some one individual, into a
> society practicing exchange among owners of private property--and with
> grossly unequal distribution of the assets to individuals--it is not at all
> obvious that free exchange makes (or leaves) the less propertied members of
> that society free.

Looks pretty foolish, now, doesn't it?  Again, he ignores the value of
work (human capital) completely.

I suppose I've made my point but I want to poke at Lindblom a bit more:

> This objection to the liberal argument does not depend on how in actual fact
> private property was historically established, how it is in fact maintained,
> or whether it is a good institution.  The objection rests on logic.

Nice technique, eh?  "If you disagree with this you are being illogical.
Besides, I have a PhD."

> The
> traditional liberal argument is incomplete unless it defends private
> property as itself consistent with freedom, a point on which it is silent.

Private property *IS* consistent with freedom, but Lindblom just can't
see that *human capital* creates wealth that can *buy* property!

But here is a token argument against even that principle:

> Some distribution of
> skills among persons would make some men greatly dependent on others-

Isn't that why we are social creatures to begin with? (*sheesh!*)

> for an
> extreme example, if only a few persons could fight and thus defend
> themselves and others.  The favored persons could extract, as a price for
> their services, concessions from the others inconsistent with their freedom,
> however freedom is defined. 

(Right, like, I'd like to get my food for free, but those fascist
store owners are making me *pay* for it!  Can you imagine?!  I'm
calling the ACLU!)

Then fighters would be highly paid -- for a while.  Then others
would train themselves to fight as well ("it's a high-paying, rewarding
career!").  But then there are more fighters.  The Incredible Hulk
is charging $50 an hour, but Hercules will fight off barbarians
for only $45 an hour.  Economic competition ensues.  Prices drop.
The free market solves yet another problem.

Say, isn't Computer Science a hot major in college these days .... ?

If all products and services were "free", how would you propose to
allocate them?  By lots?  By perceived need?  By "want"?  By
nepotism...?

"Politics offers 'free' benefits for people to fight over.  Markets
put prices on benefits, forcing each group to limit its own use of them,
thereby in effect sharing with others.  A society with both Buddhist and
Islamic citizens must somehow allocate its available building materials
in such a way as to have these materials share in the building of
temples and mosques.  If the building materials are shared through
economic processes, each set of religious followers weighs the cost
agains benefits and limits its demand accordingly.  But if these same
building materials are provided free or otherwise shared through
political processes, each group has the incentive to demand the
lion's share -- or all -- of the materials for building its own
place of worship, which is always more urgently needed, in more
grandious proportions, than the other."
[ Thomas Sowell, "The Economics and Politics of Race" ]
-- 
Gordon A. Moffett		...!{ihnp4,hplabs,sun}!amdahl!gam